Staffing Problem At Appeals Council

Here is an e-mail I received today from an employee at my law firm:

Appeal was fax’d to AC [Appeals Council] on  5/17/11, I followed up on 6/8/11 and there was no record of it. I followed up again yesterday and was told it was still not input. I said I will fax again and she said I should not fax again because it is taking 7 – 8 months to input.  Really

Not Looking Good

From the New York Times:

The Federal Reserve chairman, Ben S. Bernanke, warned on Wednesday of a “huge financial calamity” if President Obama and the Republicans cannot agree on a budget deal that allows the federal debt ceiling to be increased [and Social Security checks for August to go out]. Moody’s, the ratings agency, threatened a credit downgrade, citing a “rising possibility” that no deal would be reached before the government’s borrowing authority hits its limit on Aug. 2. 

And the latest bipartisan negotiating session on Wednesday evening ended in heightened tension if not outright discord. Republicans said Mr. Obama had abruptly walked out in an agitated state; Democrats described the president as having summed up with an impassioned case for action before bringing the meeting to a close and leaving.

Across Washington, officials were weighed down with a sense that they were hurtling toward a crisis. Grim-faced lawmakers spent the day shuttling from meeting to meeting in search of a way out of the fix....

For months, the Republican leaders have emphatically pledged that there would be no increase in the federal debt ceiling absent huge cuts in government spending and fundamental changes in popular social programs, all without the whiff of a tax increase.
Now, with negotiations stalled and a potential default by the United States government just over the horizon, they are being held to those promises by their own rank-and-file, leaving them in a bind that is defying easy resolution and putting them at risk of being blamed if things end badly.

Behind closed doors and by phone, they groped for a solution and struggled to assert some kind of control over the situation as rank-and-file Republican members, especially in the House, grew more confrontational. 

Panic had not yet set in, but the worry and tension were evident as seasoned lawmakers of both parties whose experience told them that Congress always finds a white-knuckle way to avert disaster wondered if this was going to be the time when it did not. 

Senate Republican Leader Doesn't Want To Cut Off Social Security Checks Because "I Don't Want To Help Barack Obama Get Reelected"

From the Huffington Post:

Senate Minority Leader Mitch McConnell (R-Ky.), under siege from conservatives over his opt-out proposal for the debt ceiling debate, defended the idea in crassly political terms during an interview on Wednesday morning....

"[W]e knew shutting down the government in 1995 was not going to work for us. It helped Bill Clinton get reelected. I refuse to help Barack Obama get reelected by marching Republicans into a position where we have co-ownership of a bad economy," McConnell said.  "It didn't work in 1995. What will happen is the administration will send out notices to 80 million Social Security recipients and to military families and they will all start attacking members of Congress. That is not a useful place to take us. And the president will have the bully pulpit to blame Republicans for all this disruption."

And The Response From The Most Extreme Right Wingers

I cannot say how widespread the beliefs expressed below are among Congressional Republicans but the fact that there are some saying this is a sign of just how difficult a position the Republican leadership finds itself in. By the way the man talking here, Louis Gohmert, is a nut job by almost anyone's standard. His history includes promoting the idea that terrorists are planting terror babies in this country and that President Obama wants to establish an international Islamic caliphate.
Update: One reader wondered why I bother to post a video of a nutjob speaking, which is a fair question. Look behind Mr. Gohmert. That's Michelle Bachmann. She may be the leading candidate for the Republican Presidential nomination. I think Gohmert is isolated within the Republican party but I'm not sure. If Gohmert is actually speaking for a sizable number of Republican members of Congress, we're all in trouble.

Will Social Security Checks Go Out In August?

I wish I could reassure everyone that there is no threat to the August Social Security checks but I can't. They are truly at risk. If the debt ceiling is not increased by August 2, money will not be available to pay the Social Security checks due out on August 3.
Neither the existence of a dedicated funding source for Social Security nor the existence of the Social Security trust fund will keep this from happening. The FICA tax receipts do not line up exactly with the due dates on Social Security monthly payments. To oversimplify a bit, the U.S. Treasury ordinarily deals with this situation by either taking money out of or putting money into the U.S. government bonds that are the only thing that the Social Security trust funds may be invested in. When the U.S. reaches the debt ceiling, this whole system that ordinarily works smoothly goes haywire. It would be much like trying to keep your family's bank account from being overdrawn if you had an account balance that was measured in pennies. You would have to worry about exactly when  your account would be credited with deposits you make and exactly when a check you write clears the bank. The money will be available to pay those Social Security benefits later in August but the money may be used, in part,  for other purposes because failing to extend the debt ceiling puts the government into a situation where it lacks the money to pay many of its bills. In this emergency situation, the President could do something that would ordinarily be illegal, using money that is supposed to go to Social Security to pay other bills. If you are a Social Security beneficiary, it may make you mad as hell to think that Social Security money would be used to pay other bills but the other bills include paying soldiers in the field and VA benefits and FBI agents and air traffic controllers, for instance. No one wants Social Security recipients to fail to get all their benefits on time but no one wants to avoid paying those other bills.

At the moment, Congress has not extended the debt ceiling. The President and Democrats have put forward a couple of plans to extend the debt ceiling in conjunction with plans to cut future budget deficits. Both plans involved tax increases directed at corporations and wealthy Americans. Republicans have rejected both plans. To the best of my knowledge, Republicans have put forward no specific plan of their own to combine an extension of the debt ceiling with cuts in future deficits although they have stated that they want to reduce future deficits solely by cutting the budget. The Senate Republican leader has put forward a plan to extend the debt ceiling without any cuts in future deficits coupled with an extremely odd plan that would allow the President to increase the debt ceiling  on his own for the next couple of years but also providing that Congress could vote to reject increases in the debt ceiling initiated by the President. This is such as odd plan that so far Democrats do not seem to know what to make of it. Among Republicans, this plan has gotten support from the Republican Speaker of the House of Representatives but is being criticized by many rank and file Republicans. There are also serious divisions among the Republican leadership in the House of Representatives since the number two Republican in the House of Representatives may be trying to undermine the Speaker.

One can say that everyone seems to be getting more serious about the debt ceiling. The prospect of Social Security checks not going out is a major reason for this seriousness. However, at this point, it is far from clear that anything can be passed in either house of Congress. One real problem is that the public and many members of Congress do not understand the gravity of the situation. My best guess is that there will be turmoil in financial markets in the near future if nothing is done -- in addition to a lot of recipients of federal benefits -- to concentrate the attention of the Congress.

Addendum:  If you happen to believe the threat to Social Security benefits is something that a lying Kenyan socialist contrived to scare Americans, I suggest you read David Frum's blog. He has solid right wing credentials.

Addendum: I keep hearing the question: How can this happen? Isn't Social Security a separate account? The answer is that Social Security is a separate account but it is a separate account at the U.S. Treasury. What happens when money is deposited into that separate account? It doesn't sit there in a huge pot of dollar bills. Normally, it is invested in U.S. government bonds. The problem is that failing to raise the debt ceiling puts the Treasury into an impossible bind. It cannot obey the law which requires it to make a lot of payments, including Social Security. The Treasury, and ultimately the President, has to pick and choose which payments get made and which do not. The Treasury also is in a bind because it cannot manage the nation's money properly since cash receipts do not match up with demands to make disbursements. Normally, the Treasury borrows short term money to make sure it can make disbursements without having to worry about when it receives money.
You can certainly look at this situation as proof that the Social Security trust funds aren't "real." However, there are real, practical problems with investing the Social Security trust funds in anything other than U.S. government bonds and there is no practical way for Social Security to do its banking with anyone other than the U.S. Treasury. There is just too much money involved for any private bank to handle it.

Addendum: The Congressional Research Service (CRS) has compiled a very complete report on the way the debt cap can affect government operations, including a detailed look at its effects on Social Security. Please read it if you want a fuller explanation of why Social Security checks may not be paid, at least in full, at the beginning of August if the debt ceiling is not lifted. The CRS is part of the Library of Congress and does research for members of Congress. It is thoroughly non-partisan.

eCAT Works?

From a recent report by Social Security's Office of Inspector General (footnotes and charts omitted):

The objective of our review was to determine the effects of the Social Security Administration’s (SSA) electronic claims analysis tool (eCAT) in States that use the single decision maker (SDM) model and on decisions made by the Office of Disability Adjudication and Review (ODAR). ...
ECAT is a Web-based application designed to document a disability adjudicator’s analysis and ensure all relevant Agency policies are considered during the disability adjudication process. ...

The allowance rate for SDM cases has been higher than the national allowance average in the last few years ...

In our 500 sample cases ... SDMs who used eCAT had allowance rates closer to the national average. ...

The sample ODAR cases where the DDS used eCAT were processed faster than those without eCAT ...
Additionally, the allowance rate for the cases with eCAT [at ODAR Offices] was in line with the national average [Actually, they were significantly lower but they were also significantly lower in the ODAR offices where eCAT was used even before eCAT. If anything, they came closer to national averages after eCAT.] ...

To determine whether eCAT promoted the consistent application of policy, we selected five policy issues related to the disability determination process and reviewed the sample cases to determine whether these issues were relevant and addressed in the folder documentation.

• 4 policy issues in SDM sample cases and found 11 instances where policy issues were not addressed in cases without eCAT and We reviewed
• 1 policy issue in the ODAR sample cases and found no difference between cases with eCAT and those without eCAT. ...

The eCAT tool has been quite effective. Judges are paying more attention to what the DDS has done because there is an articulated, rational basis. More weight is now being credited to the DDS’ opinions because of this articulated rationale.

Social Security Card Rip-Off

From The Plain Dealer of Cleveland:

More and more people are paying Internet companies to get a new or replacement Social Security card. But that is a service provided for free by the Social Security Administration.

Sites like www.sscardapplication.com and simplefilings.com charge between $19.99 and $44 to prepare your application for a card. That form can be completed and downloaded from the Social Security website, ssa.gov/ssnumber.

"The practices of companies like this may not be criminal, but it is a rip-off," said Solomon Harge, executive director of the Consumer Protection Association of Cleveland. "Having a disclaimer on your website does not absolve them from scamming customers."

Finally, A Warning

From CBS News:

President Obama on Tuesday said he cannot guarantee that retirees will receive their Social Security checks August 3 if Democrats and Republicans in Washington do not reach an agreement on reducing the deficit in the coming weeks.

"I cannot guarantee that those checks go out on August 3rd if we haven't resolved this issue. Because there may simply not be the money in the coffers to do it," Mr. Obama said in an interview with CBS Evening News anchor Scott Pelley, according to excerpts released by CBS News.

Update: I have taken down a couple of ridiculous comments arguing over whether the President is "lying." There have been too many abusive comments of this sort here.If anyone thinks the President is "lying", take a look at the Republican response to the President revealing that Social Security checks won't go out on August 3 unless something is done very soon on the debt ceiling.